This Man’s $120 Million Taps a Nation’s Anger: William Pesek

April 6 (Bloomberg) -- Something fascinating is afoot in
Japan: anger. People are fuming about the nuclear crisis that
put their nation in the spotlight for all the wrong reasons.

The response is restrained compared with the perpetually
aggrieved Tea Party crowd in the U.S., or Chinese who lash out
at anyone abroad with the slightest criticism. Germans are
plenty annoyed about bailing out deadbeat nations sharing the
euro.

Japan’s 127 million people have a world of defaults before
hitting on outrage, so important are harmony, social cohesion
and saving face. They’re having none of that as they watch the
hapless Tokyo Electric Power Co. operate amid Japan’s worst
crisis since World War II.

As this fascinating dynamic raises the collective blood
pressure of Japan’s masses, a tantalizing question emerges:
Could Tepco be the straw that catalyzes a push for change the
nation desperately needs? It may indeed be.

The public is realizing that Tepco is a microcosm of much
of what ails Japan. It embodies the incestuous ties between
government and industry and an antiquated economic model that
undermines Japan’s place in the world.

Tepco’s failings were exposed by a record earthquake on
March 11 and a devastating tsunami, followed by breakdowns and
radiation leaks at Tepco’s Fukushima nuclear plant. There’s
growing recognition that a big crisis might uncover manifold
examples of the bureaucracy, inefficiencies, poor strategic
planning and lack of vision for a new and better future that
hobbles Japan Inc.

Poster Child

For all of that, Tepco has become the poster child. The
cluelessness with which it’s operating even today, with the eyes
of the world fixed on Fukushima, is trying the national patience
like nothing since the 1940s. Prime Minister Naoto Kan’s failure
to nationalize Tepco has only heightened concern that no one is
in charge.

Once one of Japan’s proudest names, Tepco is now seen by
some in the same toxic class as Enron Corp. or Lehman Brothers
Holdings Inc. Each day brings new disclosures about how Tepco
doctored safety reports and underestimated risks all without
holding responsible the company directors who are still
collecting their salaries, never mind keeping their jobs.

This last indignity was put in the spotlight by Japan’s
richest man, Masayoshi Son, 53. The Softbank Corp. president
pledged to donate 10 billion yen ($120 million) and his
remaining salary until retirement to help support disaster
victims. Any headline-worthy pledges among Tepco board members?

Blood Pressure

In less-heated times, news that Tepco President Masataka
Shimizu checked into a Tokyo hospital for high blood pressure
might elicit sympathy.

Still, Japan’s media has offered only muted criticism of
Tepco. One reason is respect for the engineers and workers
risking their lives for the rest of the nation. We are all in
awe of their brave and tireless efforts. Punches are being
pulled because local journalists don’t want to cause panic.
Also, Tepco has deep pockets and friends in high places.

Media reports are taking on more ominous tones as we learn
radioactive materials will be leaking for months. Tepco
executives are receiving threats and finding their home
addresses posted on the Internet. The company has covered signs
at Tepco-employee dormitories and beefed up security.

Bigger Story

It’s important to note, though, that this story is bigger
than Tepco. The lack of transparency that has been the hallmark
of the Fukushima crisis is found much more broadly in corporate
Japan. There’s a reason thousands of companies still hold their
shareholder meetings on the same day. This ploy limits the risk
of probing questions from the floor, a stark reminder that
investor rights remain a novel idea.

Japanese are now asking about their rights, and it will be
interesting to see where the question leads. In 2009, Kan’s
Democratic Party of Japan tossed out the Liberal Democratic
Party, which had run Japan for 54 virtually uninterrupted years.
The LDP coddled Tepco for decades, allowed unaccountable
executives to ride roughshod over the nation and burdened Japan
with the largest public debt of any developed nation. Kan has a
chance for greatness.

So far, he hasn’t risen to the occasion. Kan often says the
right things about putting Japan on more stable footing; the
problem is the execution. This is Kan’s opportunity to pull a
Franklin Delano Roosevelt. The former U.S. president used anger
toward bankers in the 1930s to remake the economy, just as
Ronald Reagan used an uncompromising stand against striking air-traffic controllers in 1981 as a battle cry for broader change.

Japan is a terrific place to live. It’s an efficient,
clean, prosperous, well-educated and reasonably crime-free
nation. Yet it’s run by a generation of insular and barely
accountable politicians, bureaucrats and executives with a poor
sense of just how rapidly the world around them is evolving.

Kan has shown he sees the bigger picture. Now is the
perfect time to change things.

(William Pesek is a Bloomberg News columnist. The opinions
expressed are his own.)